TECHNOLOGY: Clear Channel Money Gives
Christopher Keough
Hiwire Inc., which provides software systems for Internet-based advertising, recently pulled in a $9.5 million round of funding from a variety of sources, including Clear Channel Communications, one of its largest clients.
The funding round is as much payback as a vote of confidence in Hiwire’s technology.
Clear Channel, the nation’s largest radio station owner, shut down its Internet operations earlier this year after advertisers voiced concerns over incurring additional royalties when broadcast ads were streamed on the Internet.
By enlisting Hiwire’s ad replacement technology, which removes broadcast advertisements and inserts customized Internet ads in their place, Clear Channel was able to start streaming its stations again without worrying about triggering additional royalties for the broadcast commercials. A first-time investor in the company, Clear Channel joined a group of existing investors that contributed to the round.
Hiwire Chief Executive Steve Goldberg said Clear Channel’s investment is encouraging because it means the broadcast behemoth firmly believes in the technology.
While it owns or operates more than 1,100 radio stations, only 250 now use Hiwire technology, a broad enough sample to give the company an opportunity to test different technologies and techniques in different markets.
Hiwire uses a server and software combination that coordinates with a radio station’s automation systems to switch commercial content between a radio station’s broadcast and its stream on the Internet. Goldberg said the company serves more than three-quarters of the available market. Hiwire makes money from revenue sharing when it or the station sells ads used on the stream and by licensing its technology to users.
The money from the new funding round will be applied toward improving technology and beefing up Hiwire’s ad sales staff.
Site to Showroom
After initial resistance, CarsDirect.com Inc. has begun offering online shoppers the option of completing deals with car dealers in real space.
With the new referral option, CarsDirect.com users have a choice of purchasing online or being referred to a dealer. Any prices listed to that point then become suggested sales prices and are open to negotiation between dealer and buyer.
The shift comes, according to Mark Miller, CarsDirect’s senior vice president of dealer and industry relations, as a result of the surging volume of consumers buying cars online.
Online car sales have increased to 6 percent of all car sales in 2001, from 4.7 percent the year before, according to J.D. Power and Associates. That represents 1 million transactions.
With the shift in strategy, Miller said CarsDirect.com will get a monthly fee from dealers who sign on for referrals.
Middle Man Resupplied
iSuppli Corp., the El Segundo Internet company that facilitates online transactions between consumers and suppliers of electronic components, received $11.5 million third round funding.
iSuppli Chief Financial Officer John Zimmerman said the funding, all of which came investors in earlier rounds, eclipsed the $10 million the company had requested and brings the company’s overall funding close to $62 million.
Having gone back to the same financing well, Zimmerman said, is not a comment on the company’s ability to attract new dollars. With the Nasdaq at half of its value of a year ago, he said, new investors are tough to come by. The new round should carry the company to its break-even point by the first quarter of 2003, according to Zimmerman.
The money will be used to roll out iSuppli’s two products and beef up staff to market and sell them. The e-commerce site connects consumers with suppliers of electronic components and market information.
Staff reporter Christopher Keough can be reached at (323) 549-5225 ext. 235 or by e-mail at
[email protected]
